The pound consolidated against the euro, but gained against the dollar during the overnight trade after report showed luxury-home prices in central London rose at a fastest pace in a year in May. Property broker Knight Frank LLP said values of homes and apartments costing an average 3.7 million pounds increased by 1.4% from the previous month. However, any gains in the sterling were limited after overnight Lloyds TSB Business Barometer (survey of UK business) showed a drop in its current economic optimism indicator. There are no additional data releases or policy speeches scheduled for today. Looking ahead to this week, the manufacturing PMI for May is released on Wednesday, with the expectations for the figure to increase to 55.1 from 54.6 in the previous reading. On Thursday and Friday we receive, respectively the construction and services PMI, with the expectations for the services figure to improve slightly. In addition, mortgage approvals and consumer credit are scheduled for this week, with the expectations for the mortgage approvals figures to consolidate slightly. Expect for the pound to remain in current ranges ahead of the manufacturing PMI release.
The euro rose across the board during the overnight trade on speculation European Union will approve additional assistance for Greece as part of the efforts to counter the regions debt crisis. Eurozone officials are set to review Greece’s progress of last year’s 110 billion euro bailout plan in next couple of days. Wall Street Journal said that Germany may stop demanding an early rescheduling of bonds for Greece in order for the country to get new package of loans. The euro also remained supported after German retail sales rose by 0.6% in April and unemployment dropped bellow 3 million (7.00%) for the first time in 19 years. Looking ahead to today, Eurozone inflation figures for May headline the economic calendar, with the expectations for the figure to remain unchanged at 2.8%.
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